As the 2017 Affordable Care Act enrollment season gets ready to open in November, consumers will find several changes forthcoming. The first many will see is increased premiums. Most carriers, in most states, are seeking double digit rate increases. New York is probably the craziest with some plans asking for as low as 6.1% with as high as 89.1%. The New York state average is 17.3%. In the state of Maine, 14% seems to be the average. In Florida, 15 carriers are seeking an average of 17.7%. In Illinois, the largest carrier, Blue Cross Blue Shield of Illinois has asked for increases depending on the plan from as low as 26% and as high as 43%.
Now, those who receive a subsidy or what is officially called an Advanced Premium Tax Credit, will not see the full cost of the increase. As the premiums increase so with the subsidy for most Americans. Those who do not receive a subsidy could see a massive increase.
The reason for these rate increases is insurance carriers have lost hundreds of millions of dollars on ACA plans and are trying to get back to profitability. As part of the profitability strategy, some carriers are exiting the health insurance market place. Some will only offer plans off the market place, some will be only in certain areas of a state. United Health Care, the country’s largest insurer is exiting all, but a handful of markets. Recently, Aetna said they were putting their expansion plans on hold and actually thinking of reducing the areas in which they were going to participate. Humana and Anthem have made similar decisions.
Prior to the ACA most plans were guarantee renewable, which means if a company left a state, they would still service the clients they had in that state. Now if a carrier leaves a state or even a county, the insured needs to find a new plan. Many Americans will find themselves looking for their fourth plan in four years.
Americans will have fewer choices in many markets. Not only are many carriers leaving the market, 16 of the 23 Co-Ops that were created under the Affordable Care Act have now been shut down, further reducing competition. The lack of competition coupled with the carriers financial losses will result in higher premiums for all.
Several insurance carriers have come out and said they will no longer pay broker commissions. This will lead to one of two things. Either the brokers will begin charging fees for their services. This is common with property and casualty insurance. Financial advisors charge fees, so it is not a new concept, however it has not been a common practice with health insurance. If brokers begin to charge fees, that will increase the cost of the consumers health insurance by several hundred dollars per year. The other option is the brokers will be completely removed from the system. This will force the consumer to do the work themselves. Purchasing health insurance in today’s environment is difficult. Most people understand what a deductible is, but they do not understand co-insurance and out of pocket maximums. Most do not realize that you have an in network and an out of network deductible. Many insurance carriers have gone to multiple networks and some doctors may be in one network and not the other. The person buying insurance may not understand how that works. Brokers spend a lot of time making sure that their clients unique needs are met. They cannot do it for free. While consumers have faced many obstacles trying to navigate themselves through the ACA spider web, 2017 looks to be the most challenging yet.
Eric Wilson is President of I Sell Health, Inc.